Will China’s “Digital Great Wall” Swallow RWAs and Stablecoins? — The Truth Investors Must Extract from This “Rejection”

“Just as the benefits of Web3 were finally reaching real-world assets, here comes China again.”

In the middle of a tunnel of yen depreciation with no clear exit, for those of you chasing the light of foreign currencies and RWA (Real World Assets), this news may have felt like a cold rain. Chinese authorities are cracking down on the “unauthorized issuance” of Yuan stablecoins and RWAs. Looking at this headline alone, it would be natural to shrink back in anticipation of a market chill.

However, the perspective the Shironegi Tech editorial team wishes to present is slightly different. This authoritarian “rejection” actually illuminates the “Map of Trust” we should be following. Why are they closing the gates? And how should those of us outside those gates behave? Let us unravel the essence of the matter.

An Inevitable Exclusion to Protect the “National Garden”

The logic of the Chinese state is transparent in this latest regulatory tightening. What they fear is not the advancement of technology itself, but the circulation of “free blood (capital)” that escapes their control.

• The “Absolute Monarchy” of the Digital Yuan (e-CNY): China is currently rushing the nationwide adoption of the Digital Yuan. There is no room for privately issued stablecoins to intervene. It is the logic of “Do not run your own private maglev train while we are still laying the state-run tracks.”
• The Breakwater against “Money Laundering”: Highly anonymous tokens can serve as “secret backdoors” for capital to flee across borders. They are erecting higher watchtowers than ever before against any movement of funds attempting to scale the national walls.
• Ruthless Stability: No “Castles in the Air”: When RWA (Real World Asset tokens) with opaque underlying assets proliferate and the bubble bursts, it is the citizens who are left to pay the price. In a sense, excluding unauthorized players is a form of “detoxification” for the financial system—a potent medicine used to protect the market.

At first glance, this might sound like a “death sentence” for cryptocurrency. However, I believe that, conversely, it marks the beginning of a selection process where “lawless chaos” ends and we move toward an organized “adult market” governed by law.

Japanese Investors Should Choose “Selection” Over “Silence”

While China closes its doors and builds a “Digital Great Wall,” how is the rest of the world moving? The United States, Europe, and here in Japan—the vector of the liberal economic sphere is pointing toward how to integrate RWAs and stablecoins within a “trustworthy legal framework.”

In the future of investing, the most critical literacy will not be “which ticker to buy.” It will be the eye to discern “which country and which jurisdiction protects this platform?”

We should not choose opaque assets of unknown origin. We must choose robust investment environments that offer high-transparency white-lists and clear the strict standards of the Financial Services Agency (FSA).

Moving blindly in a chaotic environment is equivalent to gambling. However, arming yourself with the “weapon” of correct knowledge and passing through officially recognized, safe routes is the most rational survival strategy in the modern age.

To Avoid the “Greatest Loss” Known as Cognitive Paralysis

When the world is shaken by waves of regulation, the masses often stop in their tracks, thinking, “It’s scary, so I’ll stay away.” But the wise investor realizes that the reason China is so desperate to regulate is proof that stablecoins and RWAs possess an energy massive enough to fundamentally rewrite the existing financial system.

Will you watch this wave pass as “just another news item,” or will you treat it as a “turning point for protecting your assets”? That difference will bring a decisive disparity to your portfolio a few years from now.

First, secure an entry point for reliable information and prepare yourself to move at any time. The only correct answer to an uncertain future lies in the courage to learn and choose for yourself.

To those who take a step forward and take the helm of their own assets, Shironegi Tech will continue to offer our full support and encouragement.

Note: This article is intended for informational purposes only and does not constitute investment solicitation or advice. Please make investment decisions at your own discretion.

This article is also available in Japanese.